Unions fear Harland & Wolff job losses to subsidised competitors

Northern Ireland trade union leaders have claimed that UK shipyards, including Harland and Wolff in Belfast, could lose a £240 million sterling (€383 million) Ministry of Defence contract to heavily subsidised yards in Europe.

Harland and Wolff is among the contenders for the construction of six new rollon roll-off ships which will operate on a 20-year contract to the British armed forces. The GMB union claims to have a document showing that some EU member-states were making payments to get around EU competition policy.

The GMB believes the British government is not doing enough to safeguard the industry, and has warned that yards such as Harland are losing out to heavily subsidised counterparts in other countries.

They believe the problem could also affect Harland & Wolff's chances of winning a share in a new £1 billion government order for three warships. Harland could be among the yards involved in the contract because the ships are being built along a modular system which allows parts of the warships to be built at different locations and brought together for assembly.

The problem was discussed last week at a meeting of regional ministers in London and was attended by Northern Ireland's Minister of Enterprise, Trade and Investment, Sir Reg Empey. He said it was important the Belfast company could compete on a level playing field.

"Orders for around 2,500 merchant ships are placed in shipyards around the world every year," he said. "Of this number, around 400 go to South Korea.

"The order book in Holland is 246. In the entire UK, the figure is just 15. That's a measure of the competitiveness of the market, and the difficulties faced by yards like Harland and Wolff."

Meanwhile, the yard has said there has been no further progress at this stage on the two new orders announced earlier this year. A £300 million contract for four Ropax ferries was signed at the beginning of May with the Bahamas-based shipping company Seamasters International, but negotiations continue over financing arrangements and guarantees.

The yard also hopes a letter of intent from Luxus Holdings for a £200 million order for two luxury ships will shortly become a firm contract.

There have also been reports that the Belfast yard is in the running for a £330 million cruise liner being described as "the new Titanic". The man behind the project, South African businessman Mr Sarel Gous, said a company was being set up to handle the project, and claimed that two major financial institutions were interested in funding the project.

The Luxus ships will be designed to re-create and update the spirit and service standards of the great British lines, many of whose ships were built in Belfast by Harland and Wolff. More than 200 metres in length and with 190 suites accommodating 380 passengers, they will afford larger standard cabins and greater space per passenger, and Luxus will be the only operator to offer six-star facilities to every passenger.

Harland and Wolff's chief executive, Mr Brynjulv Mugaas, said the project, to run in parallel with the Ropax contract, meant the company was compiling an order book which illustrated the diversity of projects it was in a position to undertake.

"We are focusing on our core competencies," he said, "maximising the application and contribution of internal resources and working with other best in-class providers." There has been some concern about the fact that neither contract has been confirmed, and at the failure of Seamasters International to give any details about its background. According to Fairplay, a worldwide shipping publication, the company only set up a UK subsidiary in March, using an accommodation address in Luton. But a spokesman for H&W said the company had no reservations over the standing of Seamasters.

The shipyard spokesman denied that yesterday had been the deadline for firming up the order, but said that "satisfactory progress" was being made on meeting the conditions of the contract.

"We are entirely satisfied by the bona fides of Seamasters International," he said. "It is not unusual for a customer to decide not to release any information until the contracts become effective." But the ATGWU is becoming increasingly concerned at the delay in confirming the orders. "A short time ago," a spokesman said, "our members, together with other unions, voted on a package of measures which affected wages and conditions.

"This set of conditions was narrowly accepted by the workforce on the firm understanding that it would secure the future of the yard for the foreseeable future. The workers and the unions were given the impression that if they could deliver on the changes in conditions, a firm set of orders would be put in place.

"To date these orders have not yet materialised. Yet the perception amongst the general public is that the shipyard's future is secure."